Good day, thank you for standing by. Welcome to LexinFintech First Quarter 2023 Earnings Conference C all. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be question- and- answer session. To ask a question during the session, you will need to press star one one on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Miss Jamie Wang, IR Manager. Please go ahead, ma'am. Thank you. Hello, everyone. Welcome to LexinFintech's First Quarter 2023 Earnings Conference Call. With us today on the line today are CEO Jay Xiao, President Jared Wu, and CFO James Zheng. Before we get started, I'd like to remind you that the call and presentation containing business outlook and forward-looking statements, which are based on assumptions as of today. The actual results may differ materially, and we undertake no obligation to update any forward-looking statements. Jay will first provide an update on our overall performance, James will cover the financial results in more detail, and lastly, Jared will then discuss risk management. I'll now turn the call over to Jay. His remarks will be in Chinese, and the English translation will follow. Jay, please. Good morning and evening, everyone. It's my pleasure to speak with all of you again. In the first quarter, with the gradual recovery of consumption post-pandemic and the continued improvement of the overall macro environment, consumer finance started its moderate growth. As we've maintained growth through a two-wheel drive strategy, risk upgrading and data-driven optimization, we achieved another quarter of strong results. RMB 60.9 billion in loan origination volume, up 41% year-over-year. Total outstanding balance at RMB 107 billion, up 28.0% year-over-year. Revenue at RMB 2,980 million, up 74.0% year-over-year. Net profit of RMB 327 million, an increase of 302.0% year-over-year. As demonstrated by the first quarter results, our profitability has continued to improve, with net profit margin rising to 11.0% from 4.8% in the first quarter of last year. Has grown steadily for the fourth consecutive quarter, and various operating indicators are moving in a positive direction. Let me elaborate in more detail. There were three major operational highlights in the first quarter. First, as we enhanced our user risk assessment capabilities, we accelerated our pace in reducing high-risk user segments and therefore improved the overall asset quality. Second, we continued to refine operations and further optimize operational efficiency. Third, we have been implementing cost efficiency initiatives. As a result, our profitability has been steadily rebounding. First, in terms of asset quality, we further pushed ahead on overhauling our risk management system, focused on maintenance and operation of high-quality existing customers, and gradually eliminated more high-risk users. We have iterated and upgraded the user assessment system, the risk rendering model, which automatically integrates a variety of risk models along with the combination of multidimensional risk factors into an overall user risk assessment scheme. These upgrades help us to conduct more comprehensive risk assessments and therefore make more accurate decisions on users. After being put into use, the new loan volume in the first quarter contributed by prime users increased to 88.0% from 77.0% a year ago. 针 对 部 分 细 分 人 群 ， 模 型 应 用 后 经 营 利 润 提 升 高 达 70%。 在 此 基 础 上 完 成 了 几 个 关 键 策 略 的 梳 理 。 通 过 营 销 平 台 下 达 营 销 策 略 ， 大 幅 提 升 用 户 活 跃 度 。 在 新 的 精 细 化 运 营 体 系 下 ， 一 季 度 电 销 能 力 显 著 提 升 ， 一 季 度 电 销 GMV 环 比 增 长 92%， 同 比 成 本 大 幅 下 降 ， 一 季 度 电 销 CPS 同 比 下 降 49%， 预 计 全 年 电 销 成 本 可 节 省 23%。 在 结 清 用 户 回 流 层 面 ， 在 节 约 了 一 半 营 销 成 本 情 况 下 ， 结 清 客 户 转 向 在 贷 的 客 群 回 流 率 环 比 增 长 15%， GMV 增 长 15%。 In terms of operational optimization, we upgraded our marketing system and segmented our users into more detailed and various categories based on the underlying customer tagging system and over 10 evaluation models of users' borrowing willingness, marketing preferences, responsiveness, offer satisfaction and etc. For some certain customer groups, the application of this new detailed separation of user segment model pushed up the operating profit of that specific customer group by 70.0%. On this basis, we sorted out the marketing strategy decision tree structure and launched marketing strategies accordingly, which significantly boosted users' activities. Under this new optimized operational system, in the first quarter, our telemarketing capabilities have been significantly strengthened, and the loan volume contributed by the telemarketing channel grew by 92.0% sequentially. At the same time, the cost significantly decreased in the quarter, with telemarketing cost per sale fell 49% year-over-year. We expected to save 23.0% of the original annual telemarketing cost. In front of reactivating paid up customers, the conversion rate increased 15.0% quarter-over-quarter. Loan volume from those converted customers grew 15.0% quarter-over-quarter. Additionally, these results were achieved with half of the marketing costs. 第 三 ， 盈 利 方 面 ， 降 本 增 效 持 续 推 进 ， 资 金 成 本 进 一 步 下 降 ， 推 动 盈 利 能 力 持 续 提 升 。 Third, we have enhanced our profitability attributing to our continuous efforts in cost optimization initiatives and a further reduction in financing costs. 一 季 度 管 理 费 用 九 千 七 百 零 四 万 ， 同 比 降 低 百 分 之 十 七 ， 管 理 效 率 进 一 步 提 高 。 In the first quarter of 2023, G&A expenses stood at RMB 97 million, a 17.0% decrease from a year ago. This is a clear indication of our improved operational efficiency. 贷 款 资 金 成 本 百 分 之 六 点 六 ， 环 比 下 降 零 点 二 个 百 分 点 ， 同 比 下 降 一 点 六 个 百 分 点 ， 资 金 成 本 达 到 三 年 来 最 低 。 就 在 四 月 ， 我 们 在 疫 情 三 年 后 重 启 合 作 伙 伴 大 会 ， 一 百 多 家 金 融 机 构 合 作 伙 伴 出 席 ， 未 来 将 进 一 步 深 化 合 作 。 Funding costs further dropped to 6.6%, which is 0.2 percentage point lower than last quarter and 1.6 percentage point lower from a year ago. It's worth noting that this is a historic low of funding costs during the past three years. In April, we successfully resumed our annual financial partners conference, which got suspended during the three year pandemic period. In the conference, we were very honored to have over 100 financial institutional partners with whom we will surely strengthen our business cooperation in the future. 乐 信 始 终 坚 持 技 术 和 研 发 投 入 ， 用 技 术 驱 动 发 展 。 一 季 度 研 发 投 入 达 一 点 三 亿 元 ， 继 续 保 持 行 业 领 先 。 We remain committed to investments in research and development as we firmly believe in technology is the core engine of our business growth. In the first quarter of 2023, research and development investment reached RMB 130 million, maintaining one of the highest technology input levels amongst our peers. 底 层 数 据 上, 乐 信 深 挖 数 据 血 缘, 打 通 数 据 关 联, 相 当 于 在 数 据 层 面 做 了 详 尽 的 人 口 补 偿, 构 建 起 底 层 数 据 与 宏 观 业 务 模 型 之 间 的 联 系, 是 乐 信 实 现 决 策 数 字 化 和 智 能 化 的 基 础. 基 于 此, 进 一 步 研 发 了 仿 真 预 测 系 统 、 移 动 归 因 系 统 、A/B test 平 台 等 操 作 系 统, 实 现 了 决 策 数 字 化 和 智 能 化. On the data front, we have put tremendous efforts in data mining and analysis of our entire data. Accordingly, we were able to find links and correlations amongst various data sets. Links between low-level fundamental data sets and business models are the knowledge foundation of launching data-driven and intelligent decision-making approach. Furthermore, we developed simulation predicting model, attribution model of abnormalities, A/B testing platform, and et cetera, all of which empowers management to steer business in a more data-driven and intelligent manner. 乐 信 一 直 在 积 极 探 索 和 采 用 新 技 术 来 提 高 我 们 的 工 作 效 率 和 客 户 体 验 。 一 季 度 ， 我 们 加 速 了 AI 大 模 型 在 乐 信 业 务 中 的 应 用 ， 其 中 在 研 发 代 码 辅 助 设 计 、 创 意 生 成 、 电 销 和 智 能 客 - 电 销 和 客 服 智 能 化 服 务 等 领 域 已 经 落 地 ， 并 取 得 了 显 著 的 效 率 提 升 。 以 电 销 场 景 为 例 ， 应 用 AI 大 模 型 以 后 ， 当 日 授 信 转 化 率 相 对 外 采 技 术 提 升 了 百 分 之 七 十 ， 当 日 下 单 转 化 率 提 升 了 百 分 之 十 。 未 来 我 们 将 持 续 推 进 AI 大 模 型 在 风 险 管 理 、 反 欺 诈 领 域 等 领 域 的 深 度 探 索 。 We have been continuously exploring the utilization of new technologies in optimizing operation efficiency and users' experience. In the first quarter of 2023, we expanded the application of our AI large language model in our business at a faster pace. We saw a noticeable improvement in efficiency among the application areas, including coding assistant tools, initiatives of designs, telemarketing, and smart customer services. For example, the application of this AI model in our telemarketing scenario pushed up credit line approval rates by 70% versus the technology service supplied by vendors, and also boosted order placing rates on the exact date that borrowers are granted with credit line by 10%. Looking ahead, we'll also comprehensively apply the model to the areas of risk management, anti-fraud, and et cetera. In addition, we further enhanced our existing unique Lexin ecosystem. First, e-commerce business reached RMB 1.13 billion GMV, an increase of 69.0% from last year. Cumulative customers grew by 71.0% compared to last year. The robust growth of GMV and users in e-commerce business effectively fueled the engine of Lexin consumption ecosystem. Second, the technology empowerment SaaS business achieved tangible progress, therefore won the recognition from various financial partners, including local commercial banks with AUM over RMB 1 trillion, regional urban and rural banks. The technology empowerment service facilitates our cooperation with financial partners and deepens our business relations. Third, we plan to expand our offline sales team and leverage our expertise in direct sales channels in light of the gradual recovery of China's economic activity. Our offline acquisition channels bring more firsthand user information, hence more accurate credit assessments, and eventually creating a unique competitive advantage. The strong results in the first quarter were mainly attributable to our risk management capabilities upgrading in customer risk assessment, and therefore the improvement in customer and asset quality. It is also due to our continued refining of operations and cost reduction initiatives. As for the second quarter, we understand the economic recovery and resuming consumption is a long process. We'll continue to undertake a more prudent approach. Based on our preliminary estimations, loan volume in the second quarter is expected to reach RMB 63 billion-RMB 63.5 billion, a 28%-29% growth year-over-year. Next, I'll hand over the call to our CFO, James, to share more detailed financials. Thank you. Thank you, Jay. I will now provide more details on our financial results. Please note that all numbers are in RMB, unless otherwise stated. In the first quarter, we continued our fourth consecutive quarters of recovery, both in our overall business and in our financial numbers. We expected this trajectory of turnaround to continue in light of the rebound of China's economy and our dedicated efforts in optimizing operations. The strong performance in the first quarter was a result of the management's continuous efforts in overhauling our risk management, focusing on better quality user segments, upgrading our technology and operational capabilities, as well as our new cost restructuring initiatives. Please let me explain at a high level what happened in the quarter as compared with the same quarter of 2022. The loan originations for the quarter reached RMB 60.9 billion, an increase of 41% year-over-year, beating Q1 guidance we gave earlier. Revenue grew by 74.2% year-over-year to reach around RMB 3.0 billion for the quarter, which was mainly driven by the GMV growth and an increased loan balance, which reached RMB 107 billion. The weighted average APR stood at approximately a little over 24% for the fifth quarter, close to around 1 percentage point lower than a year ago. Loans with APR under 24% now make up more than 80% of all loans. Partially offsetting the negative impact from the lower APRs on our loans was a decrease in our cost of funding from 8.2% a year ago to 6.6% in Q1. It's worth noting that this is a historical low of funding cost during the past three years. Loan tenders increased to 15.1 months versus 12.3 months a year ago. As we emphasized last quarter, overhauling risk management remains our top strategy for the year. We continue to focus on upgrading to better credit user segments and rebuilding the risk team, the systems and the process, and the infrastructure. Jared will elaborate more on this shortly. The improved results from our efforts can be partially seen in our 30-day-plus delinquency rate, which improved to 4.57% in the first quarter, as compared to 4.62% in the fourth quarter of last year. The 90-day-plus delinquency rate stood at 2.53%, basically remaining stable as compared to the previous quarter. This was due to 90-day-plus delinquency rate metric is a more lagging indicator than 30-day-plus metric. In Q1, we have been pushing ahead a series of cost restructuring initiatives that we launched last year. We have seen some further improvements to operating expenses. Total operating-related costs and op expenses, including processing and serving costs, sales and marketing, R&D, and G&A as a percentage of average loan balance stood at 1.16% versus 1.28% in Q1 of last year. This cost optimization happened in spite of a slight pickup of sales marketing expenses while G&A, R&D, and the processing and the servicing costs all came down. We will remain committed to undertaking these cost restructuring initiatives and expect our efforts to bear more fruit in the long run. As a result of the aforementioned, we are able to report net income of RMB 327 million, an increase of 302% year-over-year. The net margin improved to 11% versus 4.8% in Q1 last year. This clearly presents a steady upward trajectory of our operation result, with each quarter improving over a year ago. Apart from the above year-over-year analysis, I would also like to elaborate a little bit more on the progress achieved through quarterly comparisons. Total GMV was RMB 60.9 billion, an increase of 8.7% quarter-over-quarter, as we grew the business with prudent approach and put risk management as a top priority. In the first quarter, we saw the GMV on our e-commerce platform came down slightly from boosted high level during Singles' Day shopping festival in Q4 last year. If we carve out the revenue from e-commerce business, total Q1 revenue grew by 4.5% quarter-over-quarter. Considering impact of e-commerce business seasonality, total revenue for the whole group stayed at about RMB 3 billion, almost flat on quarter-over-quarter basis. Take rate fell slightly to 2.5% from 2.6% last quarter. The minor fluctuation in take rate is a blended result of the more booking of provision due to longer tenor loans and the continuous improvement in asset quality and the reduction in funding costs. Operating expenses stayed almost flat by a minor 1.6% increase quarter-over-quarter, attributing to pickup of sales marketing related costs in user growth. As a result of aforementioned, we achieved a sequential growth in the net income of 8.7% and a boosted net margin to 11% from 9.9% in last quarter. To summarize, we have delivered a noticeable improvement during the first quarter from both a year-over-year and a quarter-over-quarter perspective. This marks the fourth consecutive quarter of V-shaped recovery, both in top line and bottom line, since we hit the lowest point of operational results in Q1 last year. As we mentioned last quarter, although we are fully aware we have a long way ahead in our turnaround, the year of 2023 unfolds with a good start, indicating we're well on track. Next, let's take a detailed look at the financials. As mentioned, our total operating revenue for the first quarter was RMB 3 billion, representing a decrease of 2.2% quarter-over-quarter due to seasonality of e-commerce business and an increase of 74.2% year-over-year, mainly driven by the credit facilitation services and the e-commerce business. Revenue from credit facilitation service was approximately RMB 2.1 billion, representing a 7.8% increase quarter-over-quarter. A 136% increase year-over-year, which is driven by the GMV growth. Revenue from tech empowerment service was RMB 368 million, representing 10.9% decrease quarter-over-quarter, and a 26% decrease year-over-year, which was primarily due to the change of product mix among various tech empowerment services. Revenue from installment e-commerce platform service was RMB 499 million, representing a decrease of 25.9% from the last quarter and an increase of 56.6% year-over-year, which is due to seasonality of e-commerce business. Moving on to the expense side of the quarter. Sales and marketing expense increased by 4% quarter-over-quarter, which was mainly due to our stepped up investment in acquiring better quality users. Our goal is to upgrade to better quality customer groups and obtain higher LTV. While we're taking a prudent new acquisition strategy now, we will keep on closely monitoring macro data as China's economy is gradually recovering and then seize the growth opportunity when the right timing comes. Research and development expenses decreased by 4.5% quarter-over-quarter, and it decreased 15.1% year-over-year to RMB 129 million due to efficiency. G&A expenses stayed almost flat on a quarterly basis, and a decrease of 17% year-over-year to RMB 97 million. It's a noticeable cost efficiency achievement that a G&A expense remained at almost the same level on a quarter-over-quarter basis, while our top line GMV maintained an upward momentum due to a series of cost initiatives. Going forward, we plan to step up efforts in this regard. Net profit was approximately RMB 327 million in the first quarter, a 8.7% increase quarter-over-quarter, and a 302% increase year-over-year, which beats high end of our initial expectations. At the end of the first quarter, the company had a cash position of around RMB 6.5 billion on hand and a net equity position of RMB 9 billion. Finally, I would like to discuss our outlook for the second quarter of 2023. As we know, economic and consumption recovery usually will take time, as evidenced by the ongoing current quarter's modest growth. Therefore, we remain cautious and are monitoring closely on the overall macro and consumption outlook. Based on the company's preliminary assessment of the current market conditions, total loan originations for the second quarter of 2023 are expected to be around RMB 63 billion-RMB 63.5 billion, representing an increase of 28%-29% on a year-over-year basis. These estimates reflect the company's current expectation, which is subject to change. The strong results of first quarter demonstrates clearly that our turnaround is well underway. In the long run, our dedicated efforts in risk management, cost initiatives, as well as new user acquisitions, will establish solid foundations for our long-term goal of sustainable growth. With that, I would like to turn the call over to our President, Jared Wu, who will discuss our risk management. Jared, please go ahead. Thank you, James. Thank you, James. Good morning and good evening, everyone. It's my pleasure to speak with all of you again. Next, I'd like to elaborate a bit more regarding our risk management measures and improvements for the past quarter. Ever since the beginning of the year 2023, we saw a gradual recovery of China's economy. Accordingly, at the company level, we continued to implement our unwavering focus on risk management and the continuation of a prudent risk management and customer acquisition approach. In addition, we have been allocating more resources and putting more effort to better serve and favor our prime customers. In terms of our risk modeling, we have been continuously iterating our top four models and enhancing our risk assessment capabilities. In the first quarter of 2023, the day one delinquency continued to drop and overall asset quality got improved, with 30-day-plus delinquency down 5 basis points quarter-over-quarter at 4.57%. 90-day-plus delinquency, even more lag indicator standing unchanged sequentially at 2.53% as of the end of the first quarter. Currently, as business and daily life of people continue to normalize and consumer confidence being gradually restored, we will continue to hold risk management as one of the top priorities in business operations, and we expect the overall asset quality to continue to maintain a positive upward momentum. In the first quarter, increasing the proportion of prime customers remains our most crucial objective. Thus, we continue to work on upgrading our risk management system, including the following key initiatives. First, we continue to iterate and upgrade our risk management system under the business strategy of risk driving operations. Improve the granularity and the overall efficiency of risk management. Further refining our customer segments, and increasing the depth and width of our user identification capabilities, while continuing to review high-risk customers and optimize our asset structure. Second, we put heavy emphasis on investing in the coverage of PBOC credit data and strengthen the utilization of credit data. In the meantime, we continue to introduce more compliant data sources, combined with the thorough usage of internal consumption behavioral data to ensure that we can identify customer credit profile more accurately by further refine customer segmentation accordingly. Third, we continue to iterate and upgrade model matrix for different customer segments, and our ability to assess customer's credit profile has also got further improved, which is the most essential pillar for us to increase the proportion of prime customers and will be one of the most key projects in which we continue to invest. We believe that in the remainder of 2023, we will make more breakthroughs in our user identification capability. 2023 is the year of economic recovery in China. We are committed to upgrading our core risk management capabilities and accelerating the strengthening of our refined risk management system. As Jay and James mentioned earlier, we maintain a cautious view of the macroeconomic environment, adhering to the principle of risk driven, monitor the market externally and build capacities internally. Above all, we firmly believe that with a burst vision in mind and a solid infrastructure, we can continuously generate sustainable long-term returns for all shareholders. Thank you. This concludes our prepared remarks. Operator, we're now ready to take questions. Thank you. We will now begin the question-and-answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Once again, that's star 11 for questions. Our first question comes from the line of Frank Zheng from Credit Suisse. Please ask your question, Frank. Thank you, management, for taking my questions. This is Frank from Credit Suisse. My first question is regarding the supply and demand dynamics. Most recently, in the first quarter and second quarter- to- date, how would you describe the recovery of credit demand? On the supply side, is there any change in terms of risk appetite? On the other hand, could the management provide some more color on the strategic or operational focus for the rest of the year? Thank you very much. 我 来 回 答 这 个 问 题 吧 。 整 个 市 场 的 供 需 的 情 况 来 看 ， 大 家 看 到 我 们 第 一 季 度 的 业 绩 ， 第 一 季 度 的 业 绩 我 们 是 有 一 定 程 度 的 反 弹 ， 是 吧 。 大 家 看 到 这 个 第 一 季 度 的 整 个 的 反 弹 ， 我 觉 得 来 自 于 两 方 面 的 重 要 的 因 素 吧 。 第 一 个 因 素 疫 情 放 开 以 后 ， 消 费 有 这 个 释 放 ， 是 吧 。 第 二 来 自 于 我 们 自 身 对 整 个 的 一 个 精 细 化 运 营 能 力 的 提 升 ， 尤 其 是 我 们 整 个 的 风 险 识 别 的 那 个 提 升 ， 帮 助 我 们 能 够 更 好 地 更 精 准 地 去 识 别 好 的 客 户 、 坏 的 客 户 ， 是 吧 。 从 而 对 老 客 户 进 行 经 营 ， 带 来 的 我 们 存 量 客 户 的 整 个 的 一 个 需 求 的 释 放 。 大 家 知 道 ， Lexin 的 整 个 的 用 户 的 规 模 是 不 小 的 ， 存 量 客 户 的 规 模 不 小 的 。 我 相 信 我 们 存 量 的 用 户 里 面 ， 随 着 我 们 整 个 的 一 个 识 别 能 力 和 精 细 化 运 营 能 力 持 续 的 提 升 ， 存 量 客 户 的 整 个 的 价 值 和 潜 力 将 会 逐 渐 地 被 挖 掘 出 来 。 从 目 前 来 看 ， 第 二 季 度 已 经 过 了 几 个 月 吧 ， 从 我 们 看 到 的 一 些 数 据 ， 整 体 还 算 稳 定 ， 但 是 肯 定 这 个 春 节 过 后 的 这 一 波 小 高 峰 是 过 去 了 ， 是 吧 。 我 们 看 到 从 整 个 需 求 端 来 看 ， 有 所 放 缓 一 点 点 ， 但 是 还 是 保 持 在 一 个 增 长 的 一 个 这 样 的 一 个 通 道 上 面 吧 ， 是 吧 。 这 个 目 前 的 整 个 的 一 个 需 求 这 边 的 整 个 的 情 况 ， 是 吧 。 我 觉 得 在 需 求 端 ， 我 们 这 边 有 一 个 我 们 自 己 额 外 的 不 一 样 的 地 方 ， 我 们 有 商 城 ， 是 吧 ， 我 们 有 电 商 ， 有 消 费 场 景 ， 我 们 可 以 在 整 个 的 借 款 需 求 并 不 是 那 么 强 劲 和 用 户 有 刚 需 的 情 况 下 面 ， 我 们 是 可 以 通 过 电 商 的 营 销 的 方 式 ， 通 过 商 品 打 折 来 吸 引 更 多 的 用 户 来 进 行 消 费 ， 从 而 来 达 到 整 个 的 一 个 刺 激 用 户 进 行 整 个 的 一 个 有 需 求 的 这 样 的 一 个 过 程 。 我 觉 得 在 第 二 季 度 ， 你 看 最 近 我 们 开 始 在 准 备 618 ， 我 觉 得 618 又 是 一 个 很 好 的 机 会 ， 可 以 刺 激 更 多 的 用 户 去 产 生 需 求 。 我 觉 得 这 也 是 Lexin 独 特 的 一 个 地 方 吧 。 我 们 从 整 个 的 一 个 资 金 的 这 边 的 一 个 情 况 来 看 ， 我 觉 得 资 金 供 给 仍 然 还 是 比 较 充 裕 的 ， 因 为 国 内 的 整 个 的 一 个 资 金 方 ， 今 天 能 够 去 投 的 整 个 资 产 是 相 对 有 限 的 ， 是 吧 。 Lexin 经 过 10 年 吧 ， 我 们 整 个 的 风 险 还 是 得 到 了 金 融 机 构 的 认 可 。 在 上 个 季 度 我 们 也 开 了 合 作 伙 伴 大 会 ， 我 们 邀 请 了 100+ 家 金 融 机 构 来 到 现 场 ， 是 吧 。 大 家 也 共 同 表 达 了 和 Lexin 进 一 步 加 深 合 作 的 整 个 的 意 愿 。 大 家 也 可 以 看 到 ， 我 们 在 Q1 的 资 金 成 本 也 是 有 比 较 明 显 的 下 降 。 我 觉 得 在 资 金 的 供 给 端 ， 目 前 看 起 来 还 是 非 常 的 强 劲 ， 是 吧 ， 并 且 我 觉 得 是 有 一 定 的 持 续 性 的 。 Okay. I'll do the translation. Thank you, Frank. In terms of demand side, as you can see, from our first quarter's results, our overall loan volume have increased and we actually saw the rebound of the overall demand in the first quarter. It was mainly attributed by a couple of factors. The first one was the COVID and the lockdown quarantine being over, there was a spike in consumption needs and also the overall recovery. Second, it was mainly due to our refined operations as well as the capabilities in risk assessment being increased. We were able to better recognize customers to better serve the right customers and the good existing customers. We sense that most of you already knew that we have a very large existing customer pool with our improved risk assessment capabilities, we are able to better pick them out and better explore their value from the existing customers. As of right now, in the second quarter of 2023, we are as we can see the data right now, the trend is still stable. After spring breaks by past, the demand has been slowing down a little bit, but the trend of increasing is still remaining relatively strong. In that sense, we also have different products. We have our own ecosystem. We have the e-commerce, a very special consumption scenario. When the lending need is relatively not as strong as the previous quarter, we have another option to create demand, which is the product, discount on products to attract our customers. Whether it's new, whether it's the existing one, to make consumptions and to create demand. The second quarter as of right now, we are preparing the 618 Shopping Festival, which would be a great opportunity to generate more demand, thanks to our unique ecosystem. When it comes to the funding cost side, I'd say the supply is still relatively strong in position right now. Based on the current national situation right now, from our funding partners, they have limited options to really invest in. After 10 years, our risk level and our capabilities in risk management are recognized and approved by them. As you might know already, we had this cooperation conference day with our funding partners, and all of them showed the willingness to make the cooperation deeper. As you can see, our funding costs actually lowered in the first quarter and the overall supply is still relatively strong. I hope that answers your question, Frank. Thank you. I'll take- 在 今 年 的 整 个 的 一 个 重 点 工 作 上 面 呢 ， 其 实 我 们 今 年 还 是 会 坚 持 做 好 几 件 事 吧 。 我 觉 得 首 先 其 实 还 是 要 提 升 我 们 风 险 管 理 的 能 力 ， 进 一 步 在 调 优 我 们 整 个 资 产 结 构 ， 来 降 低 整 个 的 一 个 风 险 。 是 吧 ， 我 们 主 要 的 在 风 险 方 面 呢 ， 我 们 正 在 紧 锣 密 鼓 准 备 我 们 整 个 的 一 个 risk management 2.0 的 一 套 系 统 。 这 套 系 统 上 线 以 后 呢 ， 我 们 又 会 在 整 个 的 用 户 的 整 个 识 别 和 风 险 管 理 能 力 上 又 会 得 到 一 个 提 升 。 我 们 将 会 逐 步 地 开 始 来 对 这 套 系 统 进 行 整 个 的 一 个 调 适 和 运 营 。 我 相 信 这 个 上 线 以 后 呢 ， 我 们 的 整 个 的 一 个 风 险 管 理 能 力 又 会 上 一 个 台 阶 。 另 外 一 个 呢 ， 就 是 我 们 会 加 强 持 续 地 去 清 退 我 们 一 些 高 风 险 的 客 群 。 我 觉 得 并 且 会 建 立 常 态 化 的 整 个 的 高 风 险 清 退 的 整 个 的 一 套 机 制 和 体 系 。 另 外 第 二 点 呢 ， 我 想 第 二 个 工 作 呢 ， 其 实 我 想 讲 就 是 我 们 还 是 要 持 续 地 去 打 造 我 们 整 个 的 一 个 差 异 化 获 客 的 整 个 的 能 力 。 是 吧 ， 我 觉 得 Lexin 本 身 我 们 具 备 场 景 的 这 个 刚 才 也 聊 到 嘛 ， 具 备 场 景 和 电 商 有 商 城 的 这 种 场 景 的 优 势 ， 并 且 我 们 也 有 线 下 的 整 个 的 团 队 的 这 种 优 势 ， 我 们 会 加 强 我 们 这 方 面 的 优 势 来 打 造 我 们 差 异 化 的 这 种 获 客 的 能 力 。 是 吧 ， 第 三 呢 ， 就 是 我 们 还 是 会 持 续 地 精 细 化 地 运 营 ， 是 吧 ， 来 提 升 用 户 的 LTV， 提 升 我 们 整 个 的 一 个 运 营 的 效 率 ， 是 吧 。 第 四 个 呢 ， 继 续 做 好 我 们 降 本 增 效 的 工 作 ， 是 吧 。 在 一 季 度 降 本 增 效 的 工 作 还 是 比 较 明 显 的 ， 是 吧 。 我 们 看 到 我 们 整 个 的 一 个 运 营 、 销 售 、 研 发 及 管 理 费 用 占 比 在 贷 贷 余 额 的 整 个 占 比 ， 从 一 年 前 的 整 个 的 1.28% 降 低 到 了 1.16% ， 是 吧 。 净 利 润 率 也 从 4.8% 提 升 到 了 11% 。 我 觉 得 持 续 的 降 本 增 效 来 提 升 公 司 的 盈 利 能 力 ， 这 也 是 我 们 今 年 最 重 要 的 一 个 工 作 之 一 吧 。 Okay. In terms of our key strategies, there are four main ones. The first one is the risk management capability upgrading. We have been undergoing certain strategies to upgrade our asset structure and to lower risk level. We are preparing the risk management 2.0 system and when it's ready, we will get the upgrade in capabilities in risk management. We are actually doing it step by step to adjust and to operate. When it's ready, our capabilities in risk management and identifying in user risk will be significantly upgraded. We continue to do the elimination of high risk users and we are in a progress of making it a common operational thing to do the routine elimination of the high risk users. Secondly, we'll try to continue to differentiate ourselves from others in customer acquisition. Like I said earlier, we have different scenarios like e-commerce scenario and we have a very strong offline Puhui team. These are the advantages that will help us to strengthen our own capabilities. Third, we'll continue to do the refined operations to further increase the customers LTV as well as the operational efficiency. Fourth is we'll continue to undergo the cost efficiency initiative. As you can see, in the first quarter, it shows some prominent results. The percentage of our operational costs as over the outstanding loan balance actually decreased and our net margin increased to 11%. For the rest of the year, we aim to continue to increase our own profitability. Answers your question, Frank? Right. Thank you. Next question comes from the line of Alex Ye from UBS. Please go ahead, Alex. 郭颖晨 早上好。第一个问题想请教一下，这个我们在第二季度 4月、5月我们看到这个我们月度的贷款的放款量的一个情况，环比的一个趋势，能不能给我们分享一下，然后目前的一个增长和我们之前的预期相比是怎么样的？第二个关于资产质量的问题，能不能再给我们分享一些比较前瞻性的资产质量指标在4月、5月的一个情况，是不是有在继续改善？然后因为我们还在持续地不断地在完善提高我们的风控的一个能力，我们知道这个资产质量的改善的过程，它会持续多少个季度？谢谢。 I'll translate for my question. First is on the loan volume run rate in April and May. Could you share with us how has the sequential movement been so far? How does the growth you have seen now compared to your previous expectation? Second question is on your asset quality trend. Could you share with us some of the early asset quality indicators the trend in April and May? Do we expect further improvement from here? Thank you. 因为 我们 2Q 其实 整个 的 一个 交易 额, 我们 给 的 预期 大概 是 在 RMB 63 billion-RMB 63.5 billion. 我 觉得 这个 是 我们 对 2Q 的 一个 大概 的 一个 预期. month-over-month 的 数字 呢, 我 可以 讲 一下 我们 在 1Q 的 一些 数字 给 大家 参考. 其实 我们 February 的 整个 的 数据 环比 January 是 增长 了 8%, March 是 增长 了 2%. As you heard already, for the second quarter, our guidance for the loan volume was RMB 63 billion-RMB 63.5 billion. I could share some month-over-month in the first quarter results with you. The numbers of application wise, there was a minor peak in volume after the Chinese New Year. In the month of February, it showed a 8.0% increase quarter-over-quarter. For the month of March, it showed 2% month-over-month. As of now, May, we are seeing a minor decrease in the amount month-over-month as the COVID passed, the need spike kinda slowed down a little bit. We're seeing a little bit slowdown in demanding, a bit entering the second quarter, it's still in line with our management team's expectation. Okay. In terms of risk, we are seeing the first quarter's risk being stably decreased. For the second quarter, as of right now, certain early indicators is stable right now. From the new loan perspective, their, the structure, the overall structure is actually better. Whether it's the R1-R3, the percentage of R1-R3 being increased, the R6-R8 percentage being decreased from the new loan perspective, they are overall better. With the monthly new loan structure being continually improved, our overall risk level will be improved in the future with... There are still some optimizing rooms when it comes to the overall risk level. Hope that answers your question, Alex. Right. Thank you. Our next question comes from the line of Yada Li from CICC. Please go ahead, Yada. Then I'll do my translation. Hello, management. This is Yada from CICC. My first question is regarding the choice of the lending model. Could you please give us more color on the trend of the credit facilitation and the risk sharing model or tech empowerment services in the future? Will there be any plans to increase the on-balance facilitation? Secondly, I was wondering about the recent updates and outlook of Fenqile and other new consumption business. That's all. Thank you. I will take a crack at the first part of the question, and Jay will answer the second part of your question. The first part of the question is related to risk taking and profitability. Obviously, at the company level, we always try to achieve the balance. Obviously, it makes sense that if risks improves, then I wanna do a little bit more so that I increase the profitability. If somehow the risk is worsening, obviously, I don't want to do more, right? I wanna do less so that I can retain my profitability. That has been our kind of attitude. Resulted out of this basically is reflected here in terms of the proportion of the business where we take risks that is in the loan facilitation business and in rev share business, reflected in our tech empowerment part of the business. Right now, the rev share business, basically, we don't take much risks in this part. It accounts for roughly 26% or so. In the last year, it, several quarters, has been hovering between, say, 20%-30% also. We are watching very closely of the overall macroeconomic data and our overall risk indicators. If the overall macro data continue to improve and our asset quality continue to improve, obviously the overall credit situation is improving, then it doesn't preclude us from maybe taking a little bit more risks so that we increase the overall profitability for the company. Basically, that's our kind of thinking, if you will, to run the business. Now, Jay, for the second part of the question. 好 的 我 们 知 道 其 实 乐 信 我 们 自 己 比 较 独 特 的 地 方 ， 那 就 是 我 们 的 整 个 的 一 个 生 - 生 态 和 场 景 的 这 个 优 势 。 所 以 说 在 电 商 这 - 这 个 领 域 里 头 呢 ， 其 实 我 们 看 到 ， 其 实 我 们 的 整 个 增 长 还 是 相 对 比 较 强 劲 的 。 由 于 在 整 个 的 一 个 国 内 的 这 种 电 商 还 是 竞 争 比 较 激 烈 的 这 种 情 况 下 ， 我 们 在 一 季 度 我 们 能 够 增 长 百 分 之 六 十 九 ， 是 吧 ， 我 们 的 用 -- 交 易 用 户 增 长 百 分 之 七 十 一 ， 收 入 增 长 百 分 之 五 十 七 ， 其 实 还 是 不 仅 比 我 们 大 盘 的 增 速 要 快 ， 我 觉 得 比 整 个 的 行 业 增 长 还 会 更 快 。 其 实 我 们 ， 这 就 是 我 们 自 己 电 商 比 较 独 特 的 地 方 ， 那 就 是 我 们 一 个 ， 我 们 是 一 个 信 用 驱 动 的 整 个 的 消 费 的 电 商 ， 是 吧 ， 我 们 服 务 的 这 些 人 群 呢 ， 其 实 大 家 都 还 是 有 信 用 消 费 需 求 的 ， 是 吧 。 我 觉 得 其 实 在 整 个 的 一 个 ， 国 内 的 整 个 的 一 个 ， 呃 ， 当 下 的 这 个 环 境 吧 ， 尤 其 是 说 大 的 平 台 ， 大 家 对 利 率 的 要 求 越 来 越 高 的 这 种 情 况 下 面 ， 其 实 给 了 我 们 电 商 有 一 个 比 较 独 特 的 这 种 经 营 的 空 间 。 那 我 想 说 这 是 第 一 点 。 第 二 点 呢 ， 就 是 电 商 其 实 在 我 们 整 个 生 态 里 面 ， 它 未 来 将 会 在 我 们 整 个 的 获 客 ， 还 有 盘 活 存 量 客 户 的 经 营 上 面 ， 它 都 还 是 有 着 跟 消 -- 跟 我 们 的 助 贷 和 消 费 金 融 业 务 有 着 很 强 的 整 个 的 协 同 的 效 应 。 所 以 我 相 信 其 实 在 未 来 大 家 ， 大 家 可 以 看 到 这 方 面 我 们 也 会 有 更 多 的 一 些 进 展 。 那 另 外 一 个 呢 ， 就 是 ， 就 是 我 们 整 个 生 态 里 面 ， 我 想 讲 就 是 我 们 普 惠 的 这 一 块 业 务 。 我 们 普 惠 主 要 是 靠 线 下 的 整 个 BT 在 线 下 去 作 业 。 随 着 整 个 经 济 的 恢 复 吧 ， 我 觉 得 在 线 下 的 这 个 ， 这 个 团 队 ， 他 们 的 整 个 的 一 个 获 客 ， 它 的 成 -- 从 获 客 的 成 本 ， 再 到 它 的 整 个 的 一 个 所 获 客 户 的 整 个 的 风 险 上 来 看 ， 我 们 都 能 看 到 它 还 是 有 ， 有 一 定 的 整 个 的 优 势 ， 是 吧 。 今 天 整 个 线 上 的 流 量 其 实 是 越 来 越 稀 缺 的 一 个 资 源 ， 而 且 越 来 越 贵 ， 是 吧 。 那 线 下 呢 ， 其 实 它 可 以 帮 助 我 们 更 好 地 、 更 全 面 地 去 评 估 每 一 个 客 户 ， 是 吧 ， 可 以 更 加 精 准 地 去 识 别 每 个 用 户 他 的 整 个 的 意 愿 ， 他 的 整 个 偿 还 能 力 ， 是 吧 。 相 比 于 线 上 的 整 个 的 模 型 来 看 ， 我 们 在 ， 尤 其 在 今 天 这 个 存 量 竞 争 的 这 个 时 代 吧 ， 所 以 我 觉 得 我 们 能 够 更 了 解 客 户 ， 更 好 地 提 供 产 品 给 客 户 ， 普 惠 将 会 是 一 个 ， 一 个 ， 一 个 比 较 不 错 的 整 个 的 这 个 优 势 。 所 以 在 全 年 来 看 ， 我 觉 得 我 普 惠 我 们 也 会 逐 步 地 开 始 加 大 对 这 一 块 的 整 个 投 入 ， 来 形 成 乐 信 更 加 差 异 化 的 整 个 的 一 个 获 客 和 经 营 的 能 力 。 是 吧 ， 那 我 觉 得 另 外 一 个 呢 ， 就 是 讲 ， 就 是 我 们 整 个 金 融 科 技 业 务 。 这 个 金 融 科 技 业 务 呢 ， 它 其 实 就 是 乐 信 我 们 十 年 以 来 积 累 的 这 些 标 准 化 的 整 个 的 能 力 和 经 营 的 能 力 。 所 以 我 们 现 在 跟 金 融 机 构 已 经 有 五 六 家 吧 ， 达 成 了 比 较 好 的 合 作 ， 并 且 已 经 达 成 了 一 定 的 规 模 。 所 以 我 们 可 以 看 到 ， 其 实 在 这 方 面 ， 它 某 种 程 度 上 相 当 于 是 乐 信 过 去 积 累 的 能 力 的 一 个 货 币 化 的 一 个 过 程 吧 。 那 其 次 呢 ， 其 实 我 们 跟 银 行 提 供 数 科 的 这 种 服 务 呢 ， 反 过 来 又 可 以 加 强 资 金 ， 资 金 方 跟 我 们 的 整 个 合 作 ， 来 ， 来 ， 来 加 深 合 作 的 关 系 。 所 以 我 们 现 在 看 到 跟 我 们 数 科 合 作 的 一 些 银 行 ， 他 们 给 我 们 的 资 金 成 本 其 实 还 是 要 低 于 我 们 今 天 整 个 平 均 的 整 个 的 一 个 资 金 的 整 个 成 本 水 平 的 。 所 以 说 我 觉 得 这 个 ， 这 个 呢 ， 其 实 还 是 一 个 ， 一 个 ， 乐 信 我 们 还 是 一 个 比 较 独 特 的 整 个 这 个 业 务 生 态 体 系 吧 。 我 相 信 未 来 我 们 各 个 业 务 之 间 ， 它 的 整 个 协 同 ， 协 同 的 这 种 优 势 也 会 ， 也 将 会 是 乐 信 的 一 个 差 异 化 的 整 个 的 一 个 竞 争 力 之 一 吧 。 Okay. As you know we have our own Lexin ecosystem. E-commerce wise, the overall increase has been very strong, especially with other e-commerce peers or others in the industry being in the very heavy competition. As you can, as I shared already, in the first quarter, not only the volume in GMV increased year-over-year, but also the revenue as well as the customer, cumulative trading customers. They are only larger than our main business or other business within the company. They are, they are exponentially actually larger than the overall increase speed in the industry. The customer that we serve in our e-commerce areas are mostly customers with actually credit consumption needs. Under the current situation right now, the overall macro economy and environment, with ATR requirements being a little bit higher, the requirements being a little bit higher, actually gives the e-commerce sector a bit more opportunity to increase and expand a little. Furthermore, e-commerce could actually help us with the customer acquisition and as well as the customer retention with our main business, which is the loan facilitation business in the future. Next is our offline Puhui team. Our offline Puhui team mainly relies on the offline BT operations, which right now the economy being resumed, being, in recovery. The team actually helps with our customer acquisition cost and as well as risk level. We can see there are a lot of advantages comparatively when the online traffic's being more expensive as well as being more rare. The offline Puhui team help us to evaluate customers more accurately, as well as give us the capability to understand their willingness, as well as to keep them in retention. Especially with the existing customers' competitions, we get to know them better via Puhui team. We will continue to increase the investment on our offline Puhui team to help us to differentiate when it comes to customer acquisition front to better acquire better customers. Another business I'd like to mention is our tech empowerment SaaS business. It's pretty much a cumulated experience of 10 years of standardized capabilities. We already got into a cooperation with a relative sizable volume with five or six, five to six of our banking partners and our funding partners. It's pretty much a monetization of our past experience. We use them to, we use our experiences and capabilities to help them, and in return, they strengthen the cooperation in our main business, helping us with a relatively lower funding cost than the current average funding cost. I think this is a very unique system that Lexin has. We believe the cooperation between aforementioned business will be strengthened, and it will be even more interrelatable in the future to help us to differentiate ourselves among our peers. Hope that answers your question, Yara. Thank you. I'm showing no further questions. I'll now like to turn the conference back to management team for closing remarks. Thank you again everyone for joining us. If you have further questions, please contact us via our contact information available on our IR website. Thank you. 好 ， 谢 谢 大 家 。 Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.